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Alcoa (AA)
NYSE:AA

Alcoa (AA) AI Stock Analysis

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AA

Alcoa

(NYSE:AA)

Rating:73Outperform
Price Target:
$34.00
▲(7.87%Upside)
Alcoa's strong financial performance, strategic corporate actions, and favorable valuation contribute to a positive overall outlook. Technical analysis indicates bullish momentum, adding to investor confidence. However, cash flow management challenges and revenue decline impacts should be monitored.
Positive Factors
Debt Reduction
The use of cash flow to reduce net debt should be a positive for the Alcoa equity valuation over time.
Financial Performance
Alcoa is taking several actions to increase productivity, reduce costs and optimize its asset portfolio.
Tax Credits
The company will be receiving IRA production tax credits for aluminum production in the US of $50-60m per year.
Negative Factors
Global Growth
The risk of a sharp slowdown in global growth has clearly risen, which is a concern for aluminum, commodities, and the Alcoa share price.
Mining Licenses
Guinea's government has rescinded more than 50 mining licenses covering bauxite, iron ore, gold, diamonds and graphite.
Tariff Policy
Uncertainty amid abnormal volatility in alumina prices and the negative impact of new US tariff policy on aluminum.

Alcoa (AA) vs. SPDR S&P 500 ETF (SPY)

Alcoa Business Overview & Revenue Model

Company DescriptionAlcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyAlcoa makes money primarily through the production and sale of bauxite, alumina, and aluminum products. The company's revenue model is centered around its vertically integrated operations, which allow it to control costs and optimize its supply chain from mining to finished product. Key revenue streams include the sale of bauxite to third-party customers, the production of alumina for both internal use and external sales, and the fabrication of aluminum products for various industries. Alcoa's financial performance is also influenced by aluminum market prices, operational efficiencies, and strategic partnerships with major industrial players. Additionally, the company invests in innovation and sustainability initiatives to enhance product offerings and meet the evolving demands of its customers.

Alcoa Key Performance Indicators (KPIs)

Any
Any
New Chart
New Chart
Provides insights into Alcoa's latest metrics or trends, highlighting areas of innovation, strategic shifts, or emerging challenges within the company.
Chart InsightsAlcoa's recent metric shows a significant drop, which aligns with the company's reported revenue decline due to lower prices and shipments in the Alumina segment. Despite this, Alcoa's earnings call highlights strong financial resilience, with increased net income and strategic debt management. The company faces challenges from U.S. tariffs and costs related to the San Ciprian smelter restart, but its joint venture formation and operational improvements suggest a focus on long-term stability and growth.
Data provided by:Main Street Data

Alcoa Earnings Call Summary

Earnings Call Date:Apr 16, 2025
(Q1-2025)
|
% Change Since: 26.18%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial and production results, an increase in net income, and successful debt management. However, challenges such as revenue decline, the impact of U.S. tariffs, and costs associated with the San Ciprian restart were significant concerns.
Q1-2025 Updates
Positive Updates
Strong Financial and Production Results
Alcoa achieved strong first-quarter financial and production results, with significant improvements in safety performance and operational stability across most operations.
Increase in Net Income and EPS
Net income attributable to Alcoa increased to $548 million from $202 million in the previous quarter, with earnings per common share more than doubling to $2.07 per share.
Joint Venture Formation and Debt Management
Alcoa formed a joint venture with Ignis EQT for the San Ciprian operations and completed a $1 billion debt offering in Australia, using proceeds to repay existing debt and extend maturities at a lower after-tax interest expense.
Positive Free Cash Flow
Alcoa ended the first quarter with $1.2 billion in cash, driven by strong EBITDA and positive cash from operations despite high working capital build.
Negative Updates
Revenue Decline
Revenue decreased 3% sequentially to $3.4 billion, with declines in third-party revenue in the Alumina segment due to lower average realized prices and shipments.
Impact of U.S. Tariffs
The U.S. Section 232 tariffs on Canadian aluminum imports significantly impacted Alcoa, with an estimated annual net negative impact of approximately $100 million.
Challenges with San Ciprian Restart
The restart of the San Ciprian smelter is expected to result in a negative cash flow impact of $90 million to $110 million for 2025 due to inefficiencies and other costs.
Company Guidance
In the first quarter of 2025, Alcoa Corporation reported a strong performance, with a sequential revenue decrease of 3% to $3.4 billion and net income attributable to Alcoa rising to $548 million. Earnings per share more than doubled to $2.07, while adjusted net income was $568 million or $2.15 per share. The adjusted EBITDA increased by $178 million, reaching $855 million. Despite economic uncertainties, Alcoa maintained operational stability, showing improved production metrics, such as a 91% capacity operation at the Alumar smelter in Brazil. The company executed a $1 billion debt offering in Australia, which provided cash flow flexibility, ending the quarter with $1.2 billion in cash. Alcoa plans to maintain its capital allocation framework, targeting an adjusted net debt range of $1 billion to $1.5 billion. They also adjusted their full-year depreciation expense forecast to $620 million, citing favorable currency impacts. However, Alcoa faces challenges with U.S. Section 232 tariffs on Canadian aluminum, which are expected to cost approximately $400 to $425 million annually, impacting the second quarter performance by around $105 million. Despite these challenges, Alcoa's strategic actions, such as forming a joint venture with Ignis EQT and resuming production at the San Ciprian smelter, are expected to support their continued resilience and strategic objectives.

Alcoa Financial Statement Overview

Summary
Alcoa demonstrates strong revenue growth and improved operational efficiency, resulting in better profitability metrics. The balance sheet is strengthened by lower leverage and improved equity returns. However, cash flow management poses a challenge with negative free cash flow growth.
Income Statement
72
Positive
Alcoa shows a strong revenue growth with a 7.9% increase in TTM compared to the previous year. The gross profit margin improved significantly to 39.7% TTM. However, net profit margin remains low at 6.8% TTM, albeit an improvement from the previous year. EBIT and EBITDA margins have both improved to 33.5% and 16.9% TTM respectively, indicating better operational efficiency.
Balance Sheet
68
Positive
Alcoa's balance sheet reflects a robust equity position, with an equity ratio of 39.9% TTM. The debt-to-equity ratio has improved significantly to 0.01 TTM, indicating lower leverage. Return on equity has improved to 14.8% TTM, showing better profitability. However, the high total liabilities pose a risk to financial stability.
Cash Flow
65
Positive
Operating cash flow has increased by 47.9% TTM, showing strong cash generation. However, free cash flow growth is negative, declining by 17.1% TTM, highlighting concerns over capital expenditures. The operating cash flow to net income ratio is 1.07, indicating efficient cash conversion, but free cash flow to net income ratio remains low at 0.40.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue12.66B11.89B10.55B12.45B12.15B9.29B
Gross Profit2.44B1.85B738.00M2.24B3.00B1.32B
EBITDA2.14B1.52B48.00M1.32B1.86B826.00M
Net Income860.00M60.00M-651.00M-123.00M429.00M-170.00M
Balance Sheet
Total Assets14.57B14.06B14.15B14.76B15.03B14.86B
Cash, Cash Equivalents and Short-Term Investments1.20B1.14B944.00M1.36B1.81B1.61B
Total Debt2.65B2.82B1.92B1.87B1.87B2.62B
Total Liabilities8.66B8.91B8.31B8.17B8.74B9.84B
Stockholders Equity5.82B5.16B4.25B5.08B4.67B3.31B
Cash Flow
Free Cash Flow348.00M42.00M-440.00M342.00M530.00M41.00M
Operating Cash Flow920.00M622.00M91.00M822.00M920.00M394.00M
Investing Cash Flow-660.00M-608.00M-585.00M-495.00M565.00M-167.00M
Financing Cash Flow-415.00M201.00M57.00M-768.00M-1.16B514.00M

Alcoa Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.52
Price Trends
50DMA
27.57
Positive
100DMA
29.50
Positive
200DMA
34.43
Negative
Market Momentum
MACD
0.64
Negative
RSI
65.36
Neutral
STOCH
83.12
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 31.52 is above the 20-day moving average (MA) of 28.79, above the 50-day MA of 27.57, and below the 200-day MA of 34.43, indicating a neutral trend. The MACD of 0.64 indicates Negative momentum. The RSI at 65.36 is Neutral, neither overbought nor oversold. The STOCH value of 83.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Risk Analysis

Alcoa disclosed 28 risk factors in its most recent earnings report. Alcoa reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alcoa Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$2.93B24.4125.44%0.23%17.83%50.28%
AAAA
73
Outperform
$8.16B9.3317.53%1.27%21.56%
68
Neutral
$1.98B31.317.93%-2.29%-48.13%
67
Neutral
$1.69B16.6418.03%11.42%-49.21%
67
Neutral
$1.36B31.486.16%3.66%1.56%-22.11%
CLCLF
54
Neutral
$4.33B-17.57%-15.00%-423.14%
44
Neutral
C$976.20M-6.71-13.35%2.69%17.20%-32.62%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AA
Alcoa
31.52
-10.40
-24.81%
CENX
Century Aluminum
18.87
-1.29
-6.40%
CLF
Cleveland-Cliffs
8.76
-6.88
-43.99%
KALU
Kaiser Aluminum
84.17
0.28
0.33%
USLM
United States Lime & Minerals
102.43
31.93
45.29%
CSTM
Constellium
14.15
-4.44
-23.88%

Alcoa Corporate Events

M&A TransactionsBusiness Operations and Strategy
Alcoa Sells Stake in Ma’aden Joint Venture
Positive
Jul 1, 2025

On July 1, 2025, Alcoa Corporation announced the closing of its sale of a 25.1% ownership interest in the Ma’aden joint venture to Saudi Arabian Mining Company, receiving approximately $1.35 billion in shares and cash. This transaction allows Alcoa to record a gain of approximately $780 million in the third quarter of 2025 and reflects the company’s strategy to unlock shareholder value while maintaining a stake in Ma’aden for future financial visibility.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Alcoa Elects Directors and Approves Auditor Appointment
Neutral
May 13, 2025

On May 8, 2025, Alcoa Corporation held its Annual Meeting of Stockholders, where all 11 director nominees were elected for a one-year term. Additionally, stockholders approved the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025 and endorsed the executive officer compensation for 2024, reflecting continued confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 02, 2025